Cebu Air bares P1.183-B net loss in first quarter of 2020 amid COVID-19 crisis

Gokongwei-led Cebu Air Inc., the operator of low-cost carrier Cebu Pacific, saw a 135.2% plunge in its bottom line in the first quarter of the year, posting a P1.183 billion net loss due to flight cancellations and air travel restrictions arising from the COVID-19 pandemic.

In a disclosure to the Philippine Stock Exchange, Cebu Air said the net loss during the period is a reversal from the P3.356-billion net income recorded in the same period last year.

Revenues took a blow, seeing a 24.9% decline to P15.914 billion from P21.177 billion year-on-year.

"The overall decline in revenues was brought about by the impact of the Covid-19 outbreak which started with cancellation of flights to China, Hong Kong, Macau and South Korea in varying periods during the quarter due to the imposition of travel restrictions," Cebu Air said.

“With the rapid escalation of the situation surrounding COVID-19, the Philippine government implemented an enhanced community quarantine over the entire Luzon, which then prompted the group to suspend all its scheduled flights beginning March 19, 2020,” it said.

Passenger revenues for January to March dipped by P4.291 billion or 27.4% to P11.388 billion from P15.679 billion year-on-year as passenger traffic dropped 16.5% to 5.3 million from 4.4 million.

The lower passenger volume stemmed from a lesser number of flights by 14.7% coupled with 2.9 percentage points decline in seat load factor from 84.2% to 81.3%.

“Lower average fares by 13.0% to P2,580 for three months ended March 31, 2020 from P2,965 for the same period last year also contributed to the reduction of revenues,” Cebu Air said.

Cargo business also saw a decline in revenues by P428.710 million or 29.7% to P1.103 billion from P1.442 billion last year due to decrease in cargo volume transported by 20% consequent to reduced flight operations plus the effect of a lower cargo yield by about 12.2%.

Ancillary revenues declined by P543.854 million or 13.4% to P3.512 billion from P4.056 billion posted in the same period last year attributable to lesser passenger volume and flight activity during the quarter. -NB, GMA News